NOTICE OF APPLICATION

ATHABASCA OIL SANDS AREA

ALBERTA ENERGY AND UTILITIES BOARD

APPLICATION NO. 1261126

ALBERTA ENVIRONMENT

ENVIRONMENTAL PROTECTION AND ENHANCEMENT ACT

APPLICATION NO. 001-146883

WATER ACT FILE NO. 00184135  

AND ENVIRONMENTAL IMPACT ASSESSMENT REPORT

RIO ALTO EXPLORATION LTD.

Take Notice that Rio Alto Exploration Ltd. (RAX) has applied to the Alberta Energy and Utilities Board (EUB) and Alberta Environment (AENV) for approval to construct and operate a modified steam-assisted gravity drainage (SAGD) project in the Kirby Area. The proposed thermal project is located in Townships 73 and 74, Ranges 7 and 8, West of the 4th Meridian, which is approximately 85 kilometres (km) northeast of the town of Lac La Biche, Alberta. The proposed scheme will be known as the Kirby Project and developed in four phases. The project is designed to produce up to 4770 m³ of bitumen per day (30 000 barrels per day) and is expected to have an economical life of approximately 20 years. Start-up and initial production is scheduled for 2004.

The proposed project would include:

• the drilling of multiple horizontal well pairs from pads and the use of SAGD as the recovery process;

• steam generators and major process equipment, which will be located on a common lease; and

• heat recovery equipment and a water recycling system.

Nature of the Application

In support of the proposal, RAX has prepared and submitted the following applications:

• Application No. 1261126 to the EUB under Section 10 of the Oil Sands Conservation Act to authorize the proposed Kirby  Project. RAX has also prepared and submitted an Environmental Impact Assessment (EIA) report to the Director of the Regulatory Assurance Division (AENV). The EIA forms part of the application to the EUB.

• Application No. 001-146883 to AENV under the Environmental Protection and Enhancement Act (EPEA) for construction, operation, and reclamation of the Kirby Project.

• An application (File #00184135) to AENV, pursuant to Sections 37 and 50 of the Water Act (WA), to authorize water management plans including the diversion of water up to 1,300,000 cubic metres annually from groundwater and the construction of a storm water retention basin.

To File Submission with the EUB

Take notice, if you have an interest and wish to make a submission regarding Application No. 1261126, please state in writing your reasons for objecting to or supporting the application by no later than July 8, 2002. The Board will evaluate the submissions received to determine if any of the submitters may be directly and adversely affected by the decision of the Board on this application. Send one copy of your submission to the applicant at the name and address below, and seven copies of the submission to:

Frank Levstik

Alberta Energy and Utilities Board

640 5 Avenue SW

Calgary, Alberta  T2P 3G4

Any submission filed shall contain information detailing:

1. the desired disposition of the application;

2. the facts substantiating the position of the submitter; and

3. the reasons why the submitter believes the Board should decide in the manner advocated.

To File a Statement of Concern with Alberta Environment

Further take notice that pursuant to Section 73 of the EPEA and Section 109 of the WA, any person directly affected by the EPEA application may submit a written statement of concern to:

Director, Northern Region

Alberta Environment

Regulatory Approvals Centre

Main Floor, 9820 106 Street

Edmonton, Alberta  T5K 2J6

Telephone: (780) 427-6311

Fax: (780) 422-0154

Statements of concern under EPEA and WA must be submitted by July 8, 2002. Failure to file a statement of concern may affect the right to file a Notice of Objection (on appeal) with the Environmental Appeal Board. Please quote Application No. 011-146883 (EPEA) or File No. 00184135 (WA) when submitting a statement of concern. If no statements of concern are received, the EPEA and (WA) applications may be approved without further notice. Note that any statements filed regarding these applications are public records and therefore accessible by the public.

Additional Information

To obtain additional information or a copy of the application and EIA report, free of charge, contact:

Rio Alto Exploration Ltd.

2500, 205 5 Avenue SW

Calgary, Alberta  T2P 2V7

Attention: Grant Harms

Telephone (403) 716-6378

Fax: (403) 716-6646

E-mail: KirbyProject@rioalto.com

For information about EUB procedures, contact

Resources Applications

Attention: Frank Levstik

Telephone: (403) 297-8497

Copies of these applications and the EIA report are also available for viewing at the following locations:

This notice of Application is being distributed to advise interested persons that the applications are available and the EUB and other government Departments are now undertaking review of the application.

Dated at Calgary, Alberta on April 15, 2002.

Alberta Energy and Utilities Board

Michael J. Bruni, Q.C., General Counsel